Culver announces funding for flood buyouts

The city can quickly begin authorizing non-FEMA eligible home buyouts now that state's $516.7 million action plan for disaster Community Development Block Grant (CDBG) funding has been approved, Mayor Kay Halloran said Friday.

The approval of the action plan, which includes $220 million for Iowa communities to buy roughly 2,000 flood- and tornado-damaged homes not eligible for purchase by the Federal Emergency Management Administration, is “really great news that will give a lot of people hope,” Gov. Chet Culver said during a stop at the Cedar Rapids airport to announce the Department of Housing and Urban Development decision.

“This is another step forward,” said Culver, who just returned from meetings in Washington, D.C. The $220 million will fund about 2,000 buyouts in addition to those homes approved for buyout by FEMA. “We're making progress, but we're not done. This will finally to move forward.”

Halloran, who attended Culver's news conference, agreed the approval was good news. About 1,200 non-FEMA eligible Cedar Rapids homeowners are interested in buyouts. The city and many homeowners who would like to be bought out have done much of the paperwork necessary to complete the transactions. Despite that, however, she said that how quickly flooded out homeowners get their money will depend on how fast the funds flow from Washington.

“We could start authorizing transactions Monday, but we don't know how long it will take to get the money,” Halloran said.

It could be months, according to Joe O'Hern, deputy interim director of the Department of Economic Development. Real estate transactions take time and because of the number of transactions “communities going to need time to work through that number of transactions.”

“My best advice would be for homeowners to stay in touch with their community for information about how they are working through that process,” O'Hern said, adding that in some cases it could be more than six months before the buyouts occur.

Cedar Rapids has applied for $145 million of the $220 million of the CDBG funds for buyouts.

“The great news here,” Culver said, “is that thousands of homeowners are suddenly eligible for a buyout. Everyone who wants a buyout in Iowa is going to get one” if they meet the program requirements.”

Other components of the $517 million CDBG plan include:

• $125 million to build affordable housing. Culver said 80 percent of the low-income housing in Cedar Rapids “is gone” as a result of the flood.

$75 million to assist businesses damaged by the flood. The funds can be used to pay interest on SBA loans for three years.

$65 million to rebuild infrastructure, such as water and wastewater treatment systems.

$10 million to complete statewide flood mapping.

$12 million for various smaller activities, including a green initiative.